(Bloomberg) -- US consumers’ near-term inflation expectations declined for the second straight month in June as Americans lowered their outlook for how much they expect home prices and the cost of other goods to rise over the next year.
Consumers expect prices will climb at an annual rate of 3% over the next year, down from 3.2% in May, a Federal Reserve Bank of New York survey showed. The shift shows short-term inflation expectations returned to the level that held steady from December until April, when they jumped to 3.3%.
The survey lines up with data showing that inflation decelerated in recent months after being more stubborn than expected in the first quarter of this year. A report due Thursday is expected to show that the core consumer price index, which excludes food and energy costs, rose 0.2% in June for a second month. That would mark the smallest back-to-back gains since August, a pace closer to what Fed officials would like to see.
The New York Fed survey showed that consumers’ expectations for how much home prices will rise over the next year fell to 3% in June from 3.3% in May, returning to the 12-month trailing average. Consumers also said they see the cost of gas, food, medical care and rent rising less rapidly over the next 12 months.
Meanwhile, the median outlook for what inflation will be in three years rose slightly to 2.9% in June from 2.8% in May and expected inflation five years ahead dropped to 2.8% from 3%.
(Updates with additional survey results in the fourth paragraph.)
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